Background

The Port Qasim EPC power station will comprise two units of 660 MW each. It will be set up by Port Qasim Electric Power Company, a joint venture of PowerChina (51%) and Al Mirqab Capital (49%), put together by former Ehtesab Bureau chief Saifur Rehman.[1] In May 2015, Dongfang Electric Company (DEC), including Dongfang Turbin, Dongfang Electric Machinery, and SEPCO III signed an equipment supply agreement for the construction of the plant, as part of the China-Pakistan Economic Corridor project.[2]

In July 2014 Sinohydro Holding Company of Hong Kong and a Qatar-based investment firm were granted environmental clearance for a 1,320 MW coal plant in Karachi. Two 660-megawatt power generation units will be installed under the project, at a total estimated investment of $1.95 billion. According to the Environment Impact Assessment (EIA) report of the project, the estimated annual rate of coal consumption will be 4.6 tonnes and about 310,061 tonnes of fly ash and 54,871 tonnes of bottom ash will be produced annually.[3][4]

In February 2015 the National Electric Power Regulatory Authority (Nepra) approved a US$0.8 cents per unit upfront levelised tariff for the power plant over 30 years.[5]

In April 2015 China Daily reported that that Sinohydro Resources, a subsidiary of Power Construction Corp. of China Ltd. (commonly known as Power China) had signed a joint venture agreement for the project with Al Malaki Group of Qatar. Under the agreement, the venture will be a 51:49 arrangement, with Sinohydro owning the larger share. The project will include the construction of a new port for coal delivery. The project is part of China's the "One Belt, One Road" initiatives.[6]

The Pakistan Executive Committee of the National Economic Council approved the project in May 2015. The project is estimated to take four years.[7]

Construction began on May 6, 2015, and was scheduled to last 42 months; as of July 2016, however, Unit 1 was expected to go online by Q4 2017, and Unit 2 by Q1 2018, well ahead of schedule. The project will cost $2.1 billion.[8][9][10]

Financing

The project is reported to have cost approximately US$2.085 billion. The equity/debt ratio of the project was 25:75. The Import-Export Bank of China (China EXIM Bank) provided the debt finance.[13]

In June 2019 it was reported that the 1,320MW coal plant was facing financial difficulties just a year after operations began due to rising debt and the soaring cost of imported coal. Al Mirqab Capital chairman told media that his company was facing the a “payment of arrears” to the tune of PKR 21 billion (USD 133 million).[14]

Opposition

The project was opposed by local residents, who said the EIA report lacked details about coal ash disposal and an emergency plan, which experts say is necessary for projects located in a disaster-prone area like the coast.[4]